CO2 emissions declared personae non grata by the European Commission

In the wake of the Paris climate change agreement, the European Commission implemented fresh measures to consolidate its position as a global leader in clean vehicle production and consumption. The impact of air pollution on health and the disastrous effects of Dieselgate helped launch the campaign against polluting vehicles.

Automobiles are responsible for approximately 12% of global CO2 emissions in Europe. The proportion of national CO2 emissions associated with transport depends greatly on other sources of emissions. In countries with low-carbon electricity production, the transport sector is the leading cause of CO2 emissions. In France, which generates mainly nuclear electricity, the transport sector represents 35% of total emissions.

Under the new European regulations, the average emission level for new vehicles should be limited to 95g CO2 / km by 2020, i.e. 40% lower than in 2007. If the limit is breached, heavy fines of €95 per gram of CO2 above the limit will be imposed for each vehicle sold.

To encourage the development of vehicles generating particularly low emissions, the regulator has set up a system of super-credits allocated to automobiles with an emissions level below 50g CO2/km. Such vehicles will be counted twice. Thanks to these super-credits, vehicles generating particularly low emissions will have a heavier weighting in the calculation of average emissions for a fleet.

This regulation may represent a heavy cost for certain manufacturers. R&D costs for reducing the level of emissions from 130g/km to 95g/km could reach €600 per vehicle.

For manufacturers who have doubts, however, from a purely economic point of view, a report by McKinsey demonstrated that, as investing in R&D is more judicious than paying fines, a massive shift towards these technologies is in the offing.